Multiple choice

Consider the following statements:

  1. The Fiscal Responsibility and Budget Management(FRBM) Act, 2003 mandates the Union Government to eliminate the revenue deficit by the year 2010-11.
  2. Under the FRBM Act, 2003 and the FRBM Rules,2004, the Union Government is under obligation not to borrow directly from the Reserve Bank of India with effect from April 1, 2008. Which of the statements given above is/are correct?

  1. Only 1

  2. Only 2

  3. Both 1 and 2

  4. Neither 1 nor 2
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The FRBM Act originally targeted revenue deficit elimination by 2007-08 (not 2010-11), though this was later relaxed. The prohibition on direct RBI borrowing from April 1, 2006 (not 2008) was indeed a requirement, but there were exceptions like temporary ways and means advances. Given the specific dates and provisions mentioned, neither statement is entirely accurate as written.

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